Issue No 129: Technological (r)evolutions, all at once.

Third Transportation Revolution: Counterpoint

Assuming that you read today’s fourth article. Here is a great clarifier and counterpoint. If not, just ignore this!

via Ben Thompson, Stratechery.com (Subscribe, trust me):

Zimmer’s piece had the sheen of futurism — autonomous vehicle fleets, the end of private car ownership, the changing nature of cities — but honestly it’s material that has been covered pretty thoroughly over the last few years. What was interesting was the complete absence of any data points that suggested Lyft would create the future Zimmer described. So what was the point of writing it?

In fact, I suspect the New York Times already told us last month.

Lyft, the second-biggest ride-hailing company in the United States behind Uber…has found that its options are limited. The company, which is based in San Francisco, has in recent months held talks or made approaches to sell itself to companies including General Motors, Apple, Google, Amazon, Uber and Didi Chuxing, according to a dozen people who spoke on the condition of anonymity because the discussions were private. One person said it was Lyft who was approached by interested parties…

Lyft failed to find a buyer partly because of cost, the people said. Lyft was valued at $5.5 billion after an investment round by G.M. and others in January, making it one of the more pre-eminent unicorn companies in Silicon Valley. Any sale would most likely have to fetch a premium from Lyft’s last valuation to be desirable to the company and its investors.

In this context Zimmer’s piece makes perfect sense: one of the primary conclusions in my piece Google, Uber, and the Evolution of Transportation-as-a-Service is that winning the future of transportation entails far more than simply building a self-driving car, and that Uber’s lead both in terms of its technology and customer mindshare is very significant. To that end, Lyft does make sense as an acquisition target for any company wishing to be more than a commodity supplier: they have useful technology and some degree of mindshare. The problem, though, is that Lyft itself is a doomed business; Uber can and will spend them into the ground, which makes that valuation tough for a potential acquirer to swallow unless Lyft is seen as the missing piece in winning the future. So, Zimmer is selling that future.

See more of the issue here.

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